Australia’s Economy On The Up - Interest Rates Going Down
Recently, I was lucky enough to hear Craig James, CommSec's Chief Economist talk at a Sydney luncheon and the optimism in the room on the state of Australia’s economy was palpable.
According to Mr. James, who is without doubt, one of the sharpest brains on Australia’s economy, we are in excellent shape and he offered some undeniable facts to back this up:
- Inflation is at 2 %
- Unemployment is around 5%
- There has been no recession in 20 years
- There’s real wage growth
So the question he posed to the room was a great one, “with all of this great news, why so glum?”
As we all know, it’s not good news that sells and the media love reporting doom and gloom! The property market has to be positively pumping for them to admit to good times.
Housing Figures And The Media
At best the housing market is reported as stagnant but at Empire in the last quarter, we’ve had to move exceptionally quickly to fight off opposition from other strong buyers to get good deals across the line.
At our lunch, a guest asked Craig James about property investment and he was animated about now being the time to buy, especially in the city bowl of Sydney (15K radius to the city).
The Real Australian Economy – Strong GDP Growth (Gross Domestic Product)
For the March quarter, our national accounts figures revealed that the Australian economy expanded at 1.3% - double what the market expected and registering its second best growth rate in the last five years! In the last quarter it expanded by a further 0.6% which most countries would die for.
When even Joe Hockey, the Shadow Treasurer welcomes the result and concedes that the figures are 'extraordinary' then maybe it’s time to tentatively entertain the idea that, as a nation, we’re doing more than OK.
Taking all of this into account, consumer confidence is still down and because of that, the RBA took the interest rates back another 25 basis points on the second of October, bringing our base rate to 3.25 per cent which is extraordinarily low.
The Big Picture
It’s easy to get bogged down in daily routines and worry about the small stuff but the reality is that we Australians are enjoying a unique combination of the fastest growing economy in the developed world and low interest rates!
So, let’s take a moment to celebrate the fact that Australia is in a great shape and worth investing in your hard earned cash in.
For more information on getting into the property market, adding to your property portfolio or moving homes why not call me for an informal chat.
Take care all.
About Elaine Davies: Elaine’s passion for real estate started over 20 years ago when she worked as a residential property consultant for Richard Ellis in Hong Kong and Bangkok. Since arriving in Sydney, Elaine has enjoyed success as a licensed real estate agent in Sydney’s inner western suburbs. Elaine is committed to make investing in property a smooth and successful process for all concerned. For more information or to contact Elaine click here.
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